Question

Explain the relationship between stock return and performance of the registered company

Answer 1

Stock return depends upon the performance of the listed company in the market. If company is having good net profit and revenue, it has adequate cash balance and lower debt and it has grown from past few years and will continue to grow in future as well, its stock price will go up and will give good return to investors.

Company that is fundamentally and financially sound, having good market and brand value, it good liquidity, solvency and financial position, investors invest into that company's shares and share price increases, investors get capital appreciation and dividend also.

If company does not perform well over a period of time, investors do not buy its shares and its share price comes down.